Vice President for Health Policy
Similar to its estimates of the House-passed bill, the Senate Republican health bill to repeal the Affordable Care Act (ACA) would cause 22 million people to lose coverage by 2026 and drive $772 billion in federal Medicaid cuts over the next ten years, the Congressional Budget Office (CBO) found today. This means the bill would result in nearly the same number of people losing their health insurance coverage as under the House-passed bill. It also means that the bill would reverse all of the historic coverage gains achieved since the ACA was enacted in 2010.
The bill — known as the Better Care Reconciliation Act of 2017 (BCRA) — would effectively end the ACA’s Medicaid expansion starting in 2021 and radically restructure Medicaid by converting virtually the entire program to a per capita cap starting in 2020. It would also sharply cut the ACA’s marketplace tax credits and subsidies in 2020 and immediately end the ACA’s individual and employer mandates to buy and provide health coverage, respectively. The Senate bill would require insurers to impose a six-month waiting period on individuals who don’t maintain continuous coverage. It would also permit states to obtain waivers to eliminate the ACA requirement that insurers cover essential health benefits like prescription drugs and mental health treatment, which would also allow the return of annual and lifetime coverage limits. The bill would also drop the bar against insurers charging older people more than three times what they charge younger people.
Among CBO’s key findings:
As the per capita cap cuts become ever larger, CBO expects after 2026 that “enrollment in Medicaid would continue to fall relative to what would happen under current law.” Most of those losing Medicaid would likely end up uninsured. As CBO notes, while “those people would instead be eligible for a premium tax credit under this legislation … because of the expense for premiums and the high deductibles most of them would not purchase insurance….”
The bill also rearranges the current tax credit schedule, generally reducing premium tax credits for older people while increasing them for younger people. And it eliminates tax credits entirely for people with incomes between 350 percent and 400 percent of the poverty line — about $42,000 to $48,000 for a single person. For example, according to CBO, a 64-year-old with income at 375 percent of the federal poverty line would have to pay $13,700 more in premiums in 2026 for a silver plan because he would no longer be eligible for financial assistance.
Finally, like the House bill, the Senate bill would eliminate the ACA’s cost-sharing subsidies, which help lower deductibles and copayments for low-income marketplace enrollees, and would not replace them. This means that the typical deductible would jump from about $500 to $6,300 for people with incomes between 150 percent and 200 percent of the federal poverty line. As CBO notes, for a person with income at 75 percent of the federal poverty line, the deductible would be more than half his annual income.
Notably, CBO’s estimates focus on the average impact nationwide and do not take into account how residents of high-cost states would experience even larger, unaffordable increases in their premiums and other out-of-pocket costs. That’s because the across-the-board cuts to the premium tax credits would be larger in these states than in other states. In states where health costs — and hence premiums — are high, the difference in premiums between more and less generous coverage also is greater.
As CBO noted in its earlier analysis of the House-passed bill, people living in such states could experience “substantial increases in out-of-pocket spending on health care or would choose to forgo the services” entirely. Such excluded services would include: maternity care, mental health and substance use disorder treatment, rehabilitative and habilitative services, and pediatric dental care. CBO notes that out-of-pocket costs associated with maternity care and mental health and substance abuse services could increase “by thousands of dollars” and that annual and lifetime limits on benefits would also no longer apply.
Those with the greatest health care needs would see their out-of-pocket payments rise the most in states that eliminated or substantially altered the essential health benefits requirement.